I keep seeing posts that say things like "we're currently in low volume wait mode... this means the price is about to collapse... blah blah blah" so I feel the need to create a post debunking this incorrect claim.

These people are only looking at the volume in terms of BTC. But the value of BTC has risen tremendously, so that's not a reliable way to measure the total value that is exchanging hands. A more reliable way is to measure the volume in terms of the currency being traded for BTC, since it isn't as volatile.

This is the volume chart when looking at the volume in BTC (the bars are the volume, for those who have never seen a volume chart):

The value of USD hasn't changed much over this period, so it's a more reliable measure of the total value exchanging hands. We're actually seeing the highest trading volume ever. What this means? More people than ever are buying and selling Bitcoin. It is not in "low volume wait mode."

Now if the volume in terms of USD began to plateau or decline, then I would worry.

And if there is one big seller with such a low volume of sales compared to the number of bitcoins, what happens then?

I hear that Mr. Big Seller is slowly collecting more coins.. he has been going at it for five years now! As soon as he gets to 400 million coins he is going to sell them all! So be careful.

+21,000,000

And by the way. he'll just dump them into the buy side at whatever prices the buyers offer, and totally sold the last 399 millions of his coins, for which he paid $50 a coin on average, at $0.001, just to make his bearish cheerleaders happy.

Where is the data on the predictive power of this "low volume" indicator? Surely it is only useful under certain circumstances. As anyone who has watched for awhile knows, bitcoin defys all assumptions.

Where is the data on the predictive power of this "low volume" indicator? Surely it is only useful under certain circumstances. As anyone who has watched for awhile knows, bitcoin defys all assumptions.

A trend has a tendency for reversal when the price range widens, and low volume can be one of the causes.

I'm going to get out when I see price ranges start to fluctuate wildly along with lower search volume on Google Trends.